A Manufacturing Renaissance

"I really believe America is on the precipice of regaining global leadership in manufacturing," says Richard J. Harshman, chairman, president and CEO of Allegheny Technologies Incorporated (ATI), one of the largest and most diversified specialty metals producers in the world.

Harshman, 56, joined ATI predecessor company Teledyne, Inc., in 1978 after graduating from RMU with an accounting degree. He says his confidence is based on several factors: America has some of the lowest energy costs in the world. The world’s most productive workforce also is here. “What it takes one worker to do in the U.S. could take three or four workers in China,” he says, “and the wage gap between the U.S. and China is slowly closing.” Other reasons include America’s thought leadership and innovation, respect for the rule of law and human rights, and an infrastructure, including railways and interstates, that though in need of investment is in decent shape.

What’s needed most, says Harshman, is a supportive government, along with the end of an old mindset that believes America can excel in innovation while sending its manufacturing offshore. “You can’t separate the two,” he says. “Any healthy global leading economy is based off of diversification, including a strong manufacturing sector.”

The result will be a growing, diversified and globally competitive economy, he adds, and the sustainability of that growth is important for the middle class and for creating jobs and opportunities for college graduates today and in the future.

Challenges include global competitors and the volatility of America’s cyclical manufacturing markets. Still, Harshman says the glass is half full. His hope is that an industrial rebirth will change the negative image many Americans have of manufacturing. “I think what RMU can do, especially given the fact that it is located in the historical heart of U.S. manufacturing, is recognize that manufacturing industries offer rewarding career paths to its graduates. Whether you are a business, accounting, engineering, IT or tax major, it’s important to recognize that we’re embarking on a manufacturing renaissance in this country that can offer excellent career opportunities for RMU students and graduates.”

Even as Lane SteeL co., inc., celebrates 30 years in business, a new vision begins to emerge from old trends. while the Mckees Rocks-based steeL distributor and service center has historically concentrated on areas east of the Mississippi, its home base has never provided a clear strategic foothold—until now. “Pittsburgh has been one of our smallest markets,” says Paul Gedeon, president.

Gedeon, a 1987 RMU graduate, believes the Marcellus Shale natural gas boom will be essential to Lane’s growth in the years ahead while shoring up other local business opportunities. “Because we are in the hotbed of the reserves, I see us growing sooner than our out-of-town competitors,” he speculates.

With Marcellus money in the area, businesses will start adding jobs for infrastructure improvements, and people will begin renovating their homes and building new ones. This will create demand for Lane’s large inventory of flat-rolled steel products, which is incorporated into a vast array of its customers’ end-use products, including wall studs, floor decking, and electrical outlet plates.

A resurgence in U.S. manufacturing is coming, says Gedeon, because business is starting to re-shore from China and Mexico. China has a dearth of raw materials and underpaid workers, and Mexico’s lawlessness scares away investors, says Gedeon.

The key for young professionals will be to enhance their ability to communicate – in the real world. “They can text, email and Twitter, but how can you have a connection with people if you are just typing all day? The greatest part of my job is building relationships with my vendors, customers and employees,” says Gedeon. Students need to know how to interact with people face-to-face. “That’s what I enjoy,” he says. “That is what’s most important.”

While many manufacturing businesses have struggled during the recession,E.H. Schwab—Pennsylvania’s largest metal spinning and stamping company—has thrived. “We never felt the economic slowdown because we’re specialized; we have a niche process and a broad customer base,” says Dale Harrison, president.

Harrison, 63, who attended RMU from 1967-1971, is optimistic about the future of manufacturing in America. Major global companies located here such as Mitsubishi and ABB are depending on companies like E.H. Schwab to supply them with parts, he says. Overseas orders are trickling back home, and Harrison attributes it to quality. Any plant in the world can make a mixing bowl, he says, but when a part is being designed for a nuclear reactor or jet engine, it has to be made perfectly, and American expertise often has an edge.

Harrison says college engineering departments need to show students that not all manufacturing jobs are in steel mills. Exciting careers can be found in technical and electronic fields as well, and E.H. Schwab has worked on numerous projects with Carnegie Mellon University, including designing the housings and components for joysticks physicians use to control surgical robots.

He advises engineering majors to intern with a manufacturing firm and work on the plant floor. Students can create ideas and designs, but they need to understand the entire process. “They should run the machines and design the tooling to make the parts. Then they can see from the operator’s perspective.” This will make them better at recognizing design problems when they return to the drawing stage.

“I’m proud to say I went to RMU. It was a great experience,” says Harrison. “The college taught me discipline and leadership skills.”